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Firm Dynamics and Growth Measurement in France

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  • Philippe Aghion, Antonin Bergeaud, Timo Boppart & Simon Bunel

Abstract

Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. This paper uses the theory and methodology developed by Aghion et al. (2017) to quantify in the case of France how much of productivity growth is missed by statistical offices because of this. Using the census of plants in France, we find that from 2004 to 2015, about 0.5 percentage point of real output growth per year is not taken into account, which is about the same as what was found in the U.S. While this result suggests that missing growth from creative destruction could structurally be the same in different countries, we show that they in fact hide different underlying establishment and firm's lifecycle dynamics in the two countries.

Suggested Citation

  • Philippe Aghion, Antonin Bergeaud, Timo Boppart & Simon Bunel, 2018. "Firm Dynamics and Growth Measurement in France," Working papers 676, Banque de France.
    • Handle: RePEc:bfr:banfra:676
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    References listed on IDEAS

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    1. Nicholas Bloom & Charles I. Jones & John Van Reenen & Michael Webb, 2020. "Are Ideas Getting Harder to Find?," American Economic Review, American Economic Association, vol. 110(4), pages 1104-1144, April.
    2. Henning Ahnert & Geoff Kenny, 2004. "Quality adjustment of European price statistics and the role for hedonics," Occasional Paper Series 15, European Central Bank.
    3. Marianne Bertrand & Francis Kramarz, 2002. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1369-1413.
    4. Antonin Bergeaud & Simon Ray, 2021. "Adjustment Costs and Factor Demand: New Evidence from Firms’ Real Estate [The heterogeneous impact of market size on innovation: evidence from French firm-level exports]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 70-100.
    5. Kenny, Geoff & Ahnert, Henning, 2004. "Quality adjustment of European price statistics and the role for hedonics," Occasional Paper Series 15, European Central Bank.
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    Cited by:

    1. Schreiber Sven & Schmidt Vanessa, 2022. "Missing growth measurement in Germany," German Economic Review, De Gruyter, vol. 23(3), pages 493-527, August.
    2. Bergeaud Antonin & Ray Simon, 2020. "The macroeconomics of teleworking [Macroéconomie du télétravail]," Bulletin de la Banque de France, Banque de France, issue 231.
    3. Lorraine Aeberhardt & Florian Hatier & Marie Leclair & Benoît Pentinat & Jean-Denis Zafar, 2020. "Does the Digital Economy Distort the Volume-Price Split of GDP? The French Experience," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 517-518-5, pages 139-156.
    4. Flavio Calvino & Daniele Giachini & Mattia Guerini, 2022. "The age distribution of business firms," Journal of Evolutionary Economics, Springer, vol. 32(1), pages 205-245, January.
    5. Consolo, Agostino & Cette, Gilbert & Bergeaud, Antonin & Labhard, Vincent & Osbat, Chiara & Kosekova, Stanimira & Anyfantaki, Sofia & Basso, Gaetano & Basso, Henrique & Bobeica, Elena & Ciapanna, Eman, 2021. "Digitalisation: channels, impacts and implications for monetary policy in the euro area," Occasional Paper Series 266, European Central Bank.
    6. Bricongne, Jean-Charles & Delpeuch, Samuel & Lopez-Forero, Margarita, 2023. "Productivity slowdown and tax havens: Where is measured value creation?," Journal of International Economics, Elsevier, vol. 143(C).
    7. Aum, Sangmin, 2024. "Missing growth and economic fluctuations: Empirical evidence from Korea," Journal of Economic Dynamics and Control, Elsevier, vol. 164(C).
    8. Jean-Charles Bricongne & Samuel Delpeuch & Margarita Lopez Forero, 2021. "Regional Productivity Slowdown, Tax Havens and MNEs’ Intangibles: where is Measured Value Creation?," Working papers 835, Banque de France.
    9. KODAMA Naomi & Huiyu LI, 2019. "Missing Growth in the Lost Decade," Discussion papers 19026, Research Institute of Economy, Trade and Industry (RIETI).
    10. Gabriel Smagghue, 2022. "Heterogeneous Policy Distortions and the Labor Share," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 43, pages 56-79, January.
    11. Gabriel Smagghue, 2021. "Heterogeneous Policy Distortions and the Labor Share," Working papers 803, Banque de France.
    12. Anttila, Juho, 2018. "Missing Growth in Finland," ETLA Working Papers 60, The Research Institute of the Finnish Economy.
    13. L. Aeberhardt & F. Hatier & M. Leclair & B. Pentinat & J.-D. Zafar, 2019. "L’économie numérique fausse-t-elle le partage volume-prix du PIB ?," Documents de Travail de l'Insee - INSEE Working Papers g2019-04, Institut National de la Statistique et des Etudes Economiques.
    14. Jean-Charles Bricongne & Samuel Delpeuch & Margarita Lopez Forero, 2021. "Productivity Slowdown, Tax Havens and MNEs’ Intangibles: where is measured value creation?," Documents de recherche 21-01, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.

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    More about this item

    Keywords

    Growth; Price measurement; Firm dynamic; Lifecycle of plants;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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